In this 2007 file photo, Jimmy Chiu, who owned the building he lives in on Commerce and 20th Avenue in Oakland since 1989 did not have his trash picked up in weeks during a labor disputer at Oakland's trash collector Waste Management.

Photo: Mike Kepka, SFC

In this 2007 file photo, Jimmy Chiu, who owned the building he...

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In this 2007 file photo, a couple of Waste Management trucks make their way down Weldon St., collecting garbage in Oakland near the corner of Grand Ave.

Photo: Michael Macor, SFC

In this 2007 file photo, a couple of Waste Management trucks make...

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A mound of illegally dumped trash is seen across the street from the playground at Raimondi Park in West Oakland, California Tuesday October 1, 2013.

Photo: Michael Short, The Chronicle

A mound of illegally dumped trash is seen across the street from...

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On 62nd Street in Oakland a recycler searches the trash before the city trucks arrive.

Photo: Brant Ward, The Chronicle

On 62nd Street in Oakland a recycler searches the trash before the...

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Waste Management picks up trash in East Oakland in 2007.

Photo: Mike Kepka, SFC

Waste Management picks up trash in East Oakland in 2007.

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Bob Marx, a tenant living near Lake Merritt, takes a peek into the apartment building dumpsters following a pick up by Waste Management relief drivers in 2007.

Photo: Chris Stewart, SFC

Bob Marx, a tenant living near Lake Merritt, takes a peek into the...

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In this 2007 file photo, a two man security security team, in the silver van, follows the movements of a Waste Management truck as it makes it's way up Grand Ave. in Oakland.

Photo: Michael Macor, SFC

In this 2007 file photo, a two man security security team, in the...

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A man walks past illegally dumped trash in Oakland, Calif. on Thursday, March 29, 2012. West Oakland business owner Michael Herling is urging the city to impose steeper penalties to deter illegal dumping.

Oakland's plan to award a 10-year contract valued at $1 billion to a local recycling company with no experience in the garbage industry is one of the riskiest ventures the city has ever undertaken.

The City Council blew through warnings from city staff, who said California Waste Solutions - an Oakland company that provides recycling services for about 75,000 Oakland homes and 170,000 San Jose homes - isn't equipped and may not be ready to collect garbage when its contract kicks in next summer.

City staff recommended awarding the recycling and garbage contract to the company that's provided these services in Oakland for decades, Waste Management, because it has a proven track record.

None of that seemed to matter last week as the council unanimously approved the deal with California Waste Solutions. A final vote on the contract is scheduled Tuesday night.

The deal ends the city's long association with Waste Management, which city officials said refused to lower a rate increase of more than $100 a year to homeowners. California Waste Solutions' bid will cost homeowners about $80 more per year than they now pay. Waste Management's decision to lock out union workers in a 2007 labor dispute soured relations with some city officials - and left trash uncollected in some parts of Oakland for more than two weeks.

The garbage deal represents Oakland's long desire to share the bounty of the city's lucrative service contracts with local businesses. There is, of course, the added bonus of sending a corporate giant packing.

"I like the fact that David beat Goliath, but in this case David did his homework," said Councilwoman Libby Schaaf, who was initially skeptical of the smaller firm's capabilities. "At the end of the day, I think it's good for Oakland, and the big guy can't bully us for any rate he wants to get from us. We're getting the best rate we could get this time around."

Major challenges

But now that the City Council's feel-good moment is over, the reality of the challenge ahead is sobering.

In less than a year, California Waste Solutions must build a transfer station in Oakland, quadruple the size of its 50-person Oakland workforce, nearly double the size of its 70-truck fleet and invest about $80 million into the business to prepare for its debut in July, said Joel Corona, the company's chief operating officer. Between now and then, the company will have to swap out nearly 300,000 trash bins or enter a deal to acquire them from the current contractor, he added.

"We've done this before in San Jose," Corona said. "It's a process that must be planned and well implemented and it takes some time, but that's what we're going to do."

If California Waste Solutions can deliver on all of its promises, Oakland will have a garbage collection system that's the envy of other cities.

"Now that the City Council has made its decision, I want it to be clear to the council and to the public that the staff's commitment is unqualified in making sure that this is as smooth a transition as possible, and we'll do everything we can to make sure that CWS is prepared to assume its responsibilities under this award," said interim City Administrator Henry Gardner.

Backup plan

The contract calls for the company to pick up trash, organic waste and recyclables. Garbage will be sorted before being sent to a landfill. Organics will be sorted. Foodstuffs will be processed at the nearby East Bay Municipal Utility District's processing plant - where gas emissions from organic materials are captured and converted to energy. Lawn trimmings, tree branches and the like will be transported to composting sites in Napa and Yolo counties, Corona said. Recyclables will be recirculated into the marketplace for reuse.

Should any of these efforts fall short, the company has agreements in place with Republic Services, the nation's second-largest garbage hauler, to use its transfer station in Richmond. The company will also use the Republic landfill in Livermore.

If California Waste Solutions cannot put everything in place before the deadline, the city may still ultimately have to rely on yet another national corporation to provide the services that a local company doesn't have the capability to do.

Tossing the dice for basic services like police, fire and garbage is very risky business, and if this plan craps out, it could get messy.